MADRID, Sept. 26 (UPI) — Rodrigo Rato, former chief of the International Monetary Fund, appeared in a Madrid court on Monday over an alleged credit card scandal related to Spain’s Bankia bank.
Rato and 64 other bankers are on trial for allegedly using “unofficial” company credit cards for luxury purchases that were not related to their duties as bank board members. Prosecutors accuse the officials of spending about $13.5 million on hotels, clothes, travel and entertainment. The credit card purchases were not declared to tax authorities.
The troubled Bankia bank was rescued in 2012 via a public bailout. The alleged illicit spending began at Bankia’s founding savings bank Caja Madrid in 2003 and lasted until 2012.
Rato became chairman of Caja Madrid in 2010 and helped create Bankia by merging with six other savings banks in 2011. The near collapse of Bankia in 2012 forced Spain to take a $46 billion bailout from the European Union.
Rato, who headed the IMF from 2004 until 2007, has said the use of the credit cards was part of his compensation. He is accused of racking up nearly $112,000 in charges over the years. Prosecutors are seeking a four-and-a-half-year sentence for Rato.